Luxembourgh Times

Property price rises slowing down, agency says

Cost of real estate rose by 3% in the last six months, research finds, compared to 6% in the previous six month period

One of Luxembourg's many construction sites

One of Luxembourg's many construction sites © Photo credit: Marc Wilwert

Property prices in Luxembourg have slowed in the last six months, the atHome agency said on Thursday, with prices rising by 3% on average, down from 6% in the previous six month period.

Price hikes have slowed across all five regions in Luxembourg, according to the agency's figures. The slowdown was particularly sharp in the North and East where prices rose by just 2.5% and 2.7% in the last six months, compared to 13% and 10.8% in the previous six-month period, atHome said.

In the area which includes Luxembourg's capital and its lavish suburbs, and in the west of the country, price increases had virtually halved over the period in question, reaching just 2.6% and 3.9% respectively.

The slowdown in prices was smallest in the south of Luxembourg, where the cost of real estate still rose by 4.7% in the last half a year, compared to 5.5% in the previous six months.

The data indicates that Luxembourg's buoyant property market is showing signs of cooling. Whereas a property would normally be sold after the first visit, potential buyers now take longer to make up their minds, at Home said, referring to a survey it had carried out amongst industry representatives.

"It is certainly the sign of a market that is stabilising: growth cannot continue eternally", said real estate agent Abby Toussaint.

Earlier this month, the number of houses and apartments listed for sale in Luxembourg more than tripled between the end of 2021 and the first quarter of this year, real estate listing agency Immotop said.

However, property prices still increased by 3% in the last six months, according to the figures from atHome. Agents, property developers and market experts are forecasting an annual rise of between 3% and 5% this year, atHome said.

Affordable housing is a concern for the vast majority of Luxembourgers, with 82% of voters saying that they were "greatly worried" about access to affordable housing, a poll released in November found.

Prime Minister Xavier Bettel called unaffordable property "the main reason for exclusion" in Luxembourg in his state of the union speech last year.

He pledged to act against rampant housing prices that have pushed thousands across the border in search of cheaper property.

However, recent government steps to address the housing shortage, such as plans to tax owners of empty dwellings and order land owners to build on their plot, may face obstacles and will take time to produce results, the IMF said in its recent assessment.